Throughout its political rise, the Rastriya Swatantra Party (RSP) has repeatedly rejected the neoliberal label. The party’s official platform has declared that RSP is a centrist force. It has even spelt out its commitments towards a ‘social market economy’, drawing ideological parallels to the egalitarian welfare systems of Scandinavian countries. Several days ago, the party leadership reiterated this stance, explicitly stating that the party does not tow a neoliberal or a communist line nor does it support crony capitalism. However, if one were to audit all the executive decisions, draft manifestoes, legislative proposals and long-term economic plans that the party has put forward so far, one would easily detect a stark disjunction between its progressive rhetoric and the actual policy design.
Despite repeated assurances of a focus on public welfare, human capabilities and social justice, the structural reforms advocated by the party are a blueprint of ‘late-stage neoliberalism’. The RSP government’s economic template prioritises supply-side deregulation by removing state-imposed transaction costs to facilitate market activity. There is also an emphasis on marketisation of public assets and restructuring capital market infrastructure by divesting state stakes in trading and depository systems to allow private equity participation.
As far as fiscal subsidies are concerned, the RSP has already issued warnings against welfare spending. This reeks of fiscal conservatism, which prioritises structural debt management and spending cuts over non-market public entitlements. The most neoliberal factor is its policies regarding trade and foreign investment. The government intends to open primary agricultural sectors and small businesses to global venture capital and foreign direct investment, and this aligns seamlessly with the infamous Washington Consensus.
The rapid regulatory rollback aimed at ‘restoring private sector confidence’ by repealing 15 laws that restricted business and investment showcases a classic neoliberal supply-side intervention. To further appease the private sector, the government even took a stand against prosecuting financial irregularities, stating that the state would focus on financial penalties rather than imprisoning or detaining industrialists. From a statist angle, this can seriously weaken the state as it decriminalises corporate malfeasance and commodifies the rule of law into financial transactions. Further, this is a key tenet of neoliberal legal theory propounded by the Chicago School that prioritises asset protection and market continuity over public criminal accountability.
Maybe because the RSP leadership remembers the widespread anger over direct privatisation in Nepal, which sold national industrial assets in the 1990s, the government has averted using the language of outright liquidation. Instead, it uses the second-generation privatisation model widely known as Public-Private Partnerships (PPPs), in which the private partners are expected to inject capital and modern technology. The state will then purchase the output, such as uniforms for the police, armed police and army, to guarantee corporate profitability. What is interesting is that although the RSP has put this forward as a ‘social market model’, it mirrors the World Bank’s Maximising Finance for Development (MFD) approach. It insulates private corporations from market risks by guaranteeing state procurement while shifting the operational control, employment terms and profit extraction of public assets into private hands.
Not only that, while the party leadership righteously declared that their government will not indulge in crony capitalism, this approach further exacerbates the trend where private corporations lobby state officials for business perks and favours, which fuels crony capitalism. In addition, the RSP’s president, Rabi Lamichhane, has already been stained by crony capitalism in the Gorkha Media Network cooperative scandal. Worse still, sending wealthy industrialists to Parliament through the Proportional Representation (PR) quota screams crony capitalism, subverting a mechanism designed to empower marginalised communities into a backdoor for corporate lobbyists.
Moving on to the rhetoric of the social market model, the primary aim of the Nordic model is to sustain social equity, manage a mature welfare state and balance high taxes with immense public trust. Its economy is highly specialised with an open capitalist market backed by a massive public sector which employs 30 percent of its workforce. This directly clashes with the RSP’s drive to trim bureaucracy and aggressively attract foreign and domestic capital. While the Nordic model upholds a universalist cradle to grave welfare coverage, heavily funded by high-income and consumption taxes, the RSP prioritises target-driven welfare paired with middle-class tax relief based on family burden.
As far as labour dynamics are concerned, while the Nordic model thrives on robust trade unions and collaborative wage bargaining, the RSP’s anti-corruption agenda focuses on dismantling highly politicised civil service unions to rescue a crippled bureaucracy. However, if this depoliticisation campaign inadvertently dismantles the collective bargaining framework itself, it is a structural compromise Nepal cannot afford.
The Nordic model has extremely high social trust as well as stable, mature institutions and citizens willingly pay some of the highest tax rates in the world. Also, while the Nordic countries use heavy state intervention to redistribute wealth through a massive public sector, the RSP explicitly champions private-sector-led growth. This, therefore, is not about whether the policies propounded by the RSP are right or wrong for Nepal. The point here is, despite repeatedly refuting that it is not towing the neoliberal line, the RSP’s stance is blatantly neoliberal.
Lastly and most importantly, it is crucial to critically evaluate the RSP’s liberal democratic branding because a political project that marries administrative autocracy with strong economic liberalisation structurally aligns with the historical precursors of fascist statecraft. Its leaders also need to know that to borrow the liberal democratic mantle, their party must uphold individual rights, civil liberties, equality before the law, due process, institutional checks and balances and political accountability. Liberal democracy actively resists authoritarianism, censorship and systemic discrimination. The April squatter eviction campaign in Kathmandu severely undermined these norms. In the guise of urban planning and disaster mitigation, the RSP-led government systematically bypassed due process. There was a complete absence of prior verifications, coupled with a draconian timeline. The executive overreach and the subversion of democratic norms are deeply concerning.
Any governing authority that compromises constitutional safeguards and human dignity in the name of administrative expediency forfeits its claim to champion an equitable and free society.